The recent demands of marketers have been for agencies to be more transparent, particularly in their media dealing on behalf of their clients. ISBA and the ANA were vocal in their demands for greater transparency. But it will be interesting to see how marketing and particularly procurement respond to the demands of agencies to be more transparent and accountable in their agency selection process, which should be a cornerstone of the IPA and ISBA Pitch Positive Pledge.
Why? Because the decision to participate in any tendering process is a business decision and one that can only be made with a level of transparency into the process that allows the agency to make an informed decision. Too often procurement and marketers will hide behind commercial confidentiality to lure agencies into a tender process, where once the agency is committed, it becomes difficult and costly to extract themselves. Yet the information required is, on any business measure, perfectly reasonable.
What do agencies need to know?
For any agency to make the decision to commit their staff to a tender process, we believe there is just a handful of questions (five) that agencies need the answers to before making the decision on a pitch invitation. As pitch consultants, we are perfectly happy to provide, with or without the protection of a standard non-disclosure agreement, the answers to these questions and always encourage transparency and disclosure of these by our clients. Yet, time and again we hear objections from marketing and procurement to providing the transparency the agency requires to make an informed decision.
1. What is the opportunity or size of the engagement on offer?
This is often the first stumbling block as procurement feel this is negating the competitive nature of the process. But this is if the only competitive dimension is the price. The reason an agency needs to know is that too many agencies have been sucked into an onerous tender process, particularly for a major advertiser, only to discover that the tender is for a modest project only.
How can an agency decide on committing their staff to potentially hundreds of hours of unpaid overtime for the opportunity to win a contract that barely recovers the cost of the pitch process?
2. What is the planned process for selecting an agency?
Again, before committing their staff to potentially hundreds of hours of additional hours working on the tender process, the agency needs to understand and evaluate the planned process. Is it a procurement run RFP that will largely be assessed on the written proposal? Or does it require speculative creative work? And what will be the opportunity to meet with the marketing team?
Most agencies know and value the importance of the chemistry between marketing and an agency and therefore will hesitate before participating in a process largely decided by a written proposal. Others who are adept at writing tender documents, and potentially not much else, may prefer this type of tender. No matter what, it is important the agency evaluates the planned process before making the decision to commit to participating.
3. How long will the process take before a decision is made and an agency appointed?
Last year the global Coca Cola tender took 12 months to complete. Yet there are single market tenders that can take as long and are worth considerably less to the agency. The issue is either the process is poorly designed or there is a lack of commitment on behalf of the client to complete the process in a timely manner.
What the agency needs to determine is how long they will have agency resources potentially tied up in the planned process and whether this is acceptable or sustainable.
4. How many agencies will be participating in the process?
Pitching is a numbers game for both marketers and agencies. Marketers will often want to make sure they invite the maximum number of agencies to ensure they do not miss out on the right agency. This is FOMO, fear of missing out.
But likewise, the more agencies participating, just in the numbers alone, the less chance the right agency has of winning. If there are eight agencies invited, then the agency has just a 12.5% chance, compared to the pitch whereby doing their homework – the marketing team is inviting just three agencies and the chance of winning has increased to 33%. Which one would you choose?
5. What is the basis of the selection criteria for choosing a successful agency?
Where the marketer is inviting the agency to participate in the tender, the agency needs to know why they are being invited. What is it about the agency that makes them a suitable candidate? What are the criteria for the selection of the winning agency?
This informs the agency on whether they can play to their strengths. But more importantly, it shows if they have been included to simply make up the numbers or if they have been invited because they are a real contender, therefore further shortening the odds on the previous point.
Why is this so important?
Contrary to popular marketer belief, agencies do not have an excess of staff waiting for the client to contact the agency with an invitation to pitch for their business. In fact, the opposite is true. Over the past decade, competitive tension exerted through the procurement process has most agencies running lean. Add to this the demands and disruption of the global pandemic and the struggles to keep talent, and most agencies are struggling to maintain their staff’s mental and physical health.
Therefore agency management, particularly at the high performing agencies, are becoming more selected in how they stretch these resources to participate in a pitch. They are wanting to make sure the demands equate with the potential rewards – in the chance of success, the business opportunity it provides and the size of the fee.
In the past, most have taken the client on face value and been inclined to participate in the tender for fear of missing out. (There is that FOMO again.) But increasingly – and again particularly for the high performing agencies in high demand – they are looking to make more informed decisions. Marketers who are more transparent and accountable in their up-front approach to the agency will find they attract the commitment of these agencies to participate.
While those who continue to hide behind the veil of commercial secrecy will still have agencies participating, they are more likely to be from the shallow end of the creative talent pool.
TrinityP3’s comprehensive Search & Selection process provides extensive market knowledge, tightly defined process and detailed evaluation and assessment. Learn more here
